Hi y’all, welcome back to Selling Austin - your weekly local real estate recap.

Inside: Highest Rate of Refinance Rejections 🙅  + Affordable Housing Coming to Austin 🏡  

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WHAT'S INSIDE

• 🔢 THE DATA

• 🤠 WHAT’S HAPPENING AROUND TOWN

• ⁉️ WHAT THIS MEANS FOR YOU

• 🤤 HOUSE WORTH DROOLING OVER

🔢 THE DATA

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42% of mortgage refinance applications are being denied — the highest rejection rate in at least 12 years.

This might seem surprising for a couple reasons -

1. Why are people refinancing when the rates are so high?

2. Why are so many people getting rejected?

Let’s start with #1 - why are people refinancing?

Even though refinance rejection rates are high - actually refinance applications have dropped dramatically since the pandemic “refinance boom.” People refinance for a variety of reason - the two primary are - pulling out equity and to get a lower rate.

Based on the graphic above - we’re sitting at ~7% refinance rates nationally. During the 7 quarters of the pandemic refinance boom - approximately one-third of outstanding mortgages were refinanced.

#2 - why are so many applications being rejected?

There are quite a few reasons a refinance application can be rejected.

• High debt to income ratio: how much of your money is tied up paying off debt is a major factor. DTI (debt to income ratio) is calculated by dividing total monthly debts by gross monthly income

• Low credit score: usually want at least 620 to refinance

• Low home appraisal: if your home is worth less than you owe (“underwater mortgage)

TLDR: the headline is scarier than the reality - there are more rejections but significantly fewer applications. This is an indication of the tough market. Lower income households are disproportionately affected by inflation and the tough job market, they’re more likely to apply and be rejected on a refinance.

🤠 WHAT’S HAPPENING AROUND TOWN

Affordable housing coming to Austin?

A partnership with NRP Group and Austin Independent School District is moving forward with a $142M affordable housing complex in East Austin. Construction is estimated to start end of 2025 and the first units could be available for lease in 2028.

Each unit is projected to cost $211,000. 50% of all apartments will be income restricted and housing options will be offered but not limited to district teachers, staff and families.

The 674-unit project will be on an 18-acre site at 4900 Gonzales Street. 

This feels like an interesting shift?

It is. This strategy to align public land with affordable housing is aimed to combat rising house prices and the Austin affordability crisis. I’m excited to see how this plays out.

⁉️ WHAT THIS MEANS FOR YOU

If you’re a buyer/seller/investor/renter or just interested in real estate - this weekly newsletter will help guide your decision making and help you better understand the market.

🤤 HOUSE WORTH DROOLING OVER

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